Mugged by City Hall

When tax hungry public officials in Colorado team up with land hungry private developers, innocent home and business owners standing in the way are likely to get mugged city hall style. Once the city declares them public outcasts, their land is forcibly purchased at a price the government deems “fair” and then passed to a developer whose plans for the property will boost tax revenues.

City hall’s power to force owners from their land was originally restricted by the U.S. Constitution to public uses, such as building a public road or school. But private land developers, working hand in hand with city hall, have found ways around these safeguards.

Amendment V to the Constitution reads, “No person shall … be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use without just compensation.” All 50 state constitutions have similar restrictions. Clear enough. To condemn and take private property, local governments must show that the land is needed for a public use and pay “just compensation.”

Land owners once trusted local governments to respect the Constitution. But then the U.S. Supreme Court tipped the playing field in favor of land developers. During the 1950s urban renewal fever was sweeping the nation. Thousands of towns across the nation got the urge – with urban development grants from Uncle Sam – to tear down older sections of town and encourage land developers to rebuild on the confiscated land.

Property owners in these targeted areas, however, often refused to sell. And since urban renewal did not fall under the traditional eminent domain definition of “public use,” a few stubborn owners could stop a town’s urban renewal mania in its tracks.

Then, in 1954, by changing the long standing requirement for “public use” to one of “public purpose,” the Supreme Court, in effect rewrote this part of the Constitution.

To exercise eminent domain powers local governments no longer had to show the land would be used for a bona fide public use. Governments could take private property by simply declaring that the plans for the property serves a “public purpose.” It no longer mattered that the land the government forcefully takes from private citizens ends up in the hands of private land developers.

According to a report by Dana Berliner titled Public Power, Private Gain and published by the Castle Coalition, a project of the Washington-based Institute for Justice, “State and local governments took this [court action] as a green light. First they condemned slums, then blighted areas, then not very blighted areas, and now, perfectly fine areas … that happen to appeal to local bureaucrats who are hungry for dollars.”

The report lists hundreds of eminent domain abuse cases between 1998 and 2002 in all 50 states and goes on to say, “Colorado cities rarely if ever engage in the typical transfer from one owner to a specific private party. Instead, local municipalities try to cloak their condemnations in a mantle of semi-public use, like an arts center or a shopping center/town hall combination.” Cases cited include:

Aurora

The centerpiece of Aurora City Center is a 600,000 square-foot shopping center anchored by a Super Target and Barnes & Noble, and includes space for a new city hall and other municipal offices. To consolidate the project’s 67 acres in what was once the Florence Gardens neighborhood, the city declared it would use condemnation if necessary to force landowners to sell to the private developer involved in the project.

Lakewood

Continuum Lakewood Development Co., a private developer, had been acquiring the land and buildings to transform the old Villa Italia Mall. But several stores in the mall, including the profitable Foley’s department store, still had leases in the buildings. In 2001 the city condemned Foley’s lease and the leases of 20 other stores. Foley challenged the city in court, but lost.

The good news, according to the Coalition, is that threatened land owners are often able, if they act in time, to fend off abusive governments. At its Web site, www.CastleCoalition.org, land owners will find a lot of practical advice. For example, the “Eminent Domain Abuse Survival Guide” lists early warning signs that a land owner is being targeted and what steps should be taken to defend one’s property.

The founding fathers believed the duty of government was to protect the rights of property owners, not prey on them. Officials in Colorado should respect the original the U.S. Constitution, and stop using their eminent domain powers as a corporate welfare subsidy for politically favored businesses.

Ronald Fraser, Ph.D., writes on public policy issues for the DKT Liberty Project, a Washington-based civil liberties organization. He can be reached at: fraserr@erols.com.

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